Global growth to stall in 2008

The turmoil battering financial markets will push global economic growth down to levels last seen in the aftermath of the September 11 terrorist attacks, according to an economic think tank.

The world's economy will cool next year as the toxic fall-out from US sub-prime mortgages spreads around the globe, according to the Centre for Economics and Business Research.

CEBR believes global output will slow to a six-year Virgin low of 3% in 2008, with clogged-up credit markets and tumbling consumer confidence expected to keep growth depressed until at least 2010.

The CEBR's dire prediction comes amid yet another warning over Britain's illfated love affair with easy money. Unsecured borrowings have doubled to £33,000 for the average Briton since the turn of the millennium as low interest rates sparked a growing mountain of debt.

But accountancy giant PricewaterhouseCoopers predicted that the party is about to come to an abrupt end, as credit card companies lift interest rates and rein in lending. And with 1.4m households soon coming off fixed-rate mortgage deals - adding an average £140 to monthly bills - consumer confidence is almost certain to take a knock.

British firms are beginning to respond to the less ebullient mood among consumers, front-runner according to the UK's main business lobby group.
The Confederation of British Industry, whose annual conference begins today, reported over half of its members are cutting or delaying investment plans due to economic turbulence.

It is little surprise then, that Britons' confidence in the jobs market has sunk to a one-year low, said high street bank Lloyds TSB. The turmoil battering financial markets will push global economic growth down to levels last seen in the aftermath of the September 11 terrorist attacks, according to an economic think tank.

The world's economy will cool next year as the toxic fall-out from US sub-prime mortgages spreads around the globe, according to the Centre for Economics and Business Research.

CEBR believes global output will slow to a six-year Virgin low of 3% in 2008, with clogged-up credit markets and tumbling consumer confidence expected to keep growth depressed until at least 2010.